Over the past 7-8 years, Biewer Lumber has seen significant changes in the softwood market that have greatly impacted the landscape from a buying perspective. Operating four sawmills right in the heart of red pine country—two Michigan mills and two in Wisconsin – Todd Askew, mill sales at Biewer Lumber, identifies two key factors that are impacting the market:

1) Offshore business is important, but not as much as domestic demand.

Overseas destinations, China most importantly, have a great impact on the market.

Softwood lumber exports are down through 2015 Q1.

Domestic housing starts are expected to top 1 million units, a level that should be able to support more available material.

The slow start to housing in 2015 was largely weather driven; pent up demand should sustain the market well into the fall.

2) The Canadian/US Exchange rate has encouraged US buyers to import, but this could change.

Canadian softwood manufacturers have been getting a better return by shipping to the US because of the 120+% exchange rate.

The “Softwood Lumber Agreement” between the two countries is applying a tax on Canadian shipments, payable by the mills.

So far the advantageous exchange rate has outweighed any applied tax.

The tax is likely to increase. It is based on a rolling average of the Random Lengths Composite Price. In 2015, expect to see the tax be brought up to its maximum level.

Some Canadian producers may see a reduced return in shipping the US because of this.

Companies that rely on products harvested by the lumber industry continually face criticism for perceived bad environmental practices. But do the construction, flooring, and pallet industries contribute to deforestation or the degradation of wooded areas and other ecosystems?
carbon cycle
Here are two questions we routinely hear about lumbering and the manufacturing of lumber-based products:

Doesn’t lumbering destroy forests and soil?

Forests in the United States are managed entirely differently than they were in the past when clearcutting rebuilt the city of Chicago after its great fire. Instead, Reduced-impact logging, or tree-specific logging, can reduce carbon emissions by up to 30%. As a result, America’s commercial forests are actually growing, even with lumbering and loss to tree diseases or insect predators. We now have more trees in our national landscape than we did at the end of World War II.

Currently forest acreage in the United States numbers 751.2 million acres, but the nation’s privately owned forest reserves are actually more endangered by agricultural or residential development than by clearcutting. On government-owned land, lumber companies pay to replant trees after they are done cutting to ensure a constant replenishment of trees and the continuation of ecosystems. Foresting and protecting biodiversity do not have to be conflicting goals. Lumbering businesses understand that without a continuous supply of trees to harvest, they will be out of business. They are highly incentivized to maintain healthy and productive forests.

Isn’t wood a less environmentally friendly building material than plastic, cement, or brick?

Wood is a renewable resource and requires a limited amount of energy investment to use. In terms of air and water pollution and greenhouse gas emissions, it’s the best choice. It weighs significantly less than steel or cement, so it can be transported using less fuel. Processing lumber into furniture, flooring, or pallets does not require complex chemical processes with toxic byproducts. Unwanted wastes created by lumbering and wood-products manufacturing can easily be used for mulch or wood pellets. In fact, wood pallets themselves are made from the unusable trims of milled logs. While plastic products are often useful and can be environmentally friendly, wood products often have a lesser environmental impact.

The supply of wood used by wood-product industries is continually being renewed, and scientists understand better every day how we as a society can leave less of an impact on our lands and forests. Remember: wood is a natural product used by man for thousands of years for any number of purposes. In many ways it’s an ideal material. Frankly we should be using lumber for more purposes in our society, not less.